Malaysia's finance ministry has been bailing out 1MDB since April 2017: Lim Guan Eng

Malaysia's finance ministry has been bailing out 1MDB since April 2017: Lim Guan Eng

Malaysia has been "bailing out" 1Malaysia Development Berhad's (1MDB) debt obligations since April 2017, and payments on behalf of the state fund amounted to RM6.98 billion (US$1.8 billion), the newly appointed finance minister said on Tuesday (May 22). Sumisha Naidu reports.

KUALA LUMPUR: Malaysia has been "bailing out" 1Malaysia Development Berhad's (1MDB) debt obligations since April 2017, and payments on behalf of the state fund amounted to RM6.98 billion (US$1.8 billion), the newly appointed finance minister said on Tuesday (May 22).

The sum included interest and coupon payments, and a RM5.05 billion settlement made to Abu Dhabi fund IPIC, Lim Guan Eng said in a statement.

"The above confirms the public suspicion that 1MDB had essentially deceived Malaysians by claiming that they have been paid via a 'successful rationalisation exercise'. All these while it has been the MoF (finance ministry) who has bailed out 1MDB," he said.

"It is clear that the previous government has conducted an exercise of deception to the public about certain hot button items, especially 1MDB, and even misrepresented the financial situation to parliament."

He added that more payments, totalling RM953.96 million, will fall due between this between this month and November. From 2022, "billions of ringgit of debt" will be due, he said. 

After consolidating the nation's financial accounts, Malaysia's debt could be more than RM1 trillion, he said at a news conference, echoing what Prime Minister Mahathir Mohamad had said on Monday.

Mr Lim, who was sworn in as finance minister on Monday, also said he was briefed on the "shocking revelation" that treasury officials and the country's auditor general were not able to access certain accounts and reports.

“There were also complaints that certain ‘red files’ were only accessible to certain parties and this had impeded the officials and auditors from carrying out their professional responsibilities with integrity," he said.

"A thorough investigation and discovery is still ongoing to uncover the necessary financial information and data," Mr Lim said in the statement.

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On the financial health of the country, Mr Lim said he was optimistic and confident that Malaysia will be able to overcome these challenges. 

“On a positive note, the Malaysian financial and banking system remains robust and well-capitalised. In addition, non-performing loans constitute less than one per cent of the total loans portfolio. 

“The fundamentals of the economy remain strong. Hence, once we are able to clean up the Federal Government finances, we will be able to further strengthen public and investor confidence in Malaysia,” he added. 

The 1MDB investigation has been among the new government's priorities since the Pakatan Harapan coalition won the May 9 general election. 

Earlier on Tuesday, the head of Malaysia's anti-graft agency gave an explosive account of how witnesses disappeared and officers were purged and intimidated after they tried in 2015 to charge Mr Najib for siphoning funds from 1MDB.

Describing the lengths taken to suppress an investigation at the time, Shukri Abdull - who was restored to the agency following Mr Najib's shock election defeat - said that on one occasion a bullet was sent to his home.

Mr Najib has consistently denied any wrongdoing since the 1MDB scandal erupted in 2015. After giving a statement at the anti-corruption agency on Tuesday, the former prime minister spoke briefly to reporters, saying he would be returning to complete his statement on Thursday.

Source: Reuters/Bernama/nc/(gs)

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